Did you know that your retirement account avoids probate? Since there is a beneficiary form associated with this account, it is considered non-probate property, and will get to your beneficiary more quickly than probate property.
Just like your other estate planning documents, your retirement account needs to be properly set up and maintained in order to reap the benefits, and you need to:
1. Make sure you have named a primary beneficiary along with a secondary beneficiary (some forms may call it a contingent beneficiary) for each IRA.
2. Obtain a copy of the beneficiary form for each IRA and keep it with your other estate planning documents, and make sure your estate planning attorney and your estate’s executor have copies.
3. If there are multiple beneficiaries on one IRA, make sure that each beneficiary’s share is clearly identified with a fraction, percentage or the word “equally,” if applicable rather than simply listing the names and assuming an equal split.
4. Make sure that the financial institution holding the IRA has your beneficiary designations on file and that their records agree with yours.
5. Let your beneficiaries know where to locate your IRA beneficiary forms.
6. Review your IRA beneficiary forms annually or when major life changes, such as marriage or divorce, occur to make sure the designations are correct and current.
7. Review your beneficiary choices with your estate planning attorney to make sure they coordinate with your overall estate plan.
The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.